Logistics of switching from adviser to online brokerage (Questrade)

[FrugalFan]

OK, so we have pretty much decided to switch from Edward Jones to an online brokerage (Questrade). I chatted online with someone from there yesterday and he said we can transfer funds in kind or in cash and invest as we please.

Questions.
1) We currently have several accounts with Edward Jones (RRSP each, TFSA each, joint margin). Will all of these show up as separate accounts in Questrade? Will it be obvious what is in each account and how to invest in each account?

2) Most of our investments are currently in high MER mutual funds (>all 2.0%) with back-end loads of nearly 6%. The issue is that we have been contributing to these funds every year, so the loads for some of our early contributions have probably already expired, but some of the recent ones probably haven't. Will this be obvious with the transfer? How will we know? Or should we just screw it and sell everything and start fresh regardless of the cost? We'll be hit by some capital gains as well.

We can hire someone for a large sum to set all of this up for us, but I am trying to figure out whether we can do it ourselves. I just don't know what to expect once we transfer.

[fb132]

1) You have to open up all 3 by providing ID to questrade, once that is approve, I am pretty sure you can transfer your funds to the following accounts, but they will be in cash and not in a fund (I am not 100»% sure on that one) and Edward Jones might charge for leaving them (I know RBC does), but Questrade is doing a promotion in which they pay the fees if you get hit by them (They reimburse you up to 300$ I think). So if you have 15 000$ in Edward Jones TFSA,they will transfer 15000$ in Questrade TFSA but under cash.

2) Once they are in Questrade, just put them in ETF's. Your MER will be much much lower, less than 1%.

[FrugalFan]

Thank you. The guy at Questrade told me we could transfer in kind or cash. It might be best to do in kind so we could try to mediate the capital gains and back-end loads a bit, but I'm not sure how obvious it would be to do that. It might be simpler just to transfer to cash and cut our losses. He was just a new accounts guy so couldn't answer any of my questions except the cash vs in kind thing. Kind of frustrating.

[fb132]

Thank you. The guy at Questrade told me we could transfer in kind or cash. It might be best to do in kind so we could try to mediate the capital gains and back-end loads a bit, but I'm not sure how obvious it would be to do that. It might be simpler just to transfer to cash and cut our losses. He was just a new accounts guy so couldn't answer any of my questions except the cash vs in kind thing. Kind of frustrating.

Just start from scratch, you pay way too much fees, but you will get hit with some fees no doubt about it. Edward Jones will probably make sure you pay for leaving them, they all do.

[RichMoose]

I would start by opening the appropriate accounts at Questrade. It goes relatively quick, but may take a few weeks to get all the approvals finalized.

RRSP & TFSA accounts are easy. Once you have access to your accounts at Questrade, request a transfer in cash. Yes you will take a hit on back-loads, but the significantly reduced fees of investing in ETFs is work it. Your average MER will drop to around 0.15% at the most.

Be careful with the margin account. Some (many) advisors with EJ recommend using a significant amount of margin because it nicely boosts their commissions. When you sell you have to be aware of capital gains in these accounts. Depending on the level of margin used and the amount of capital gains, it may be best to just leave the money that's there until a better selling opportunity comes along (ie. stock market crash etc).

Questrade will reimburse transfer fees up to a certain amount. Take a look at the promo section of their main website and take advantage of those. If you would like to use the "Refer a Friend" promo, of course I would be glad to be that friend. :)

[daverobev]

Transfer in kind where there will be cap gain issues (ie, unreg), and in cash for registered, IMHO. The sooner you cut out the shite the better (ie the loads) where you can. If the cap gain isn't too painful then just do the lot.

If you're transferring > $100k, refer a friend gets you $250, but there is a different promo to get a $500 apple gift cert - if that's your thing, or if not I'm sure you could sell it for $450.

Refer a friend gets the referee a mere $25, so definitely do the other if you can.

[FrugalFan]

Thanks, all! Makes sense to transfer the registered accounts in cash and the margin in kind at first. I'll have a look at all the promos. I'd be happy to use the refer-a-friend promo if it works out. I think my husband would like the Apple watch, but maybe I can somehow use two promos if I'm transferring more than 200k.

[RichMoose]

Thanks, all! Makes sense to transfer the registered accounts in cash and the margin in kind at first. I'll have a look at all the promos. I'd be happy to use the refer-a-friend promo if it works out. I think my husband would like the Apple watch, but maybe I can somehow use two promos if I'm transferring more than 200k.

If you are transferring several hundred thousand, it may be worthwhile for you to investigate moving to a big bank discount brokerage like RBC Direct. You may have much more flexibility there to have them cover transfer costs and gain additional perks (like free trading commissions on your first 10 trades or something like that). If you are investing several thousand dollars at a time, the commission costs of buying ETFs will be negligible over the long run.

Don't get me wrong, Questrade is good at what they do for the price. But this means they are most beneficial to beginning investors who buy ETFs in small chunks. Their customer service can be lacking at times.

[fb132]

Thanks, all! Makes sense to transfer the registered accounts in cash and the margin in kind at first. I'll have a look at all the promos. I'd be happy to use the refer-a-friend promo if it works out. I think my husband would like the Apple watch, but maybe I can somehow use two promos if I'm transferring more than 200k.

If you are transferring several hundred thousand, it may be worthwhile for you to investigate moving to a big bank discount brokerage like RBC Direct. You may have much more flexibility there to have them cover transfer costs and gain additional perks (like free trading commissions on your first 10 trades or something like that). If you are investing several thousand dollars at a time, the commission costs of buying ETFs will be negligible over the long run.

Don't get me wrong, Questrade is good at what they do for the price. But this means they are most beneficial to beginning investors who buy ETFs in small chunks. Their customer service can be lacking at times.

I called them a few times and they are very helpfull, unless you have had a bad experience.

[FrugalFan]

Thanks, all! Makes sense to transfer the registered accounts in cash and the margin in kind at first. I'll have a look at all the promos. I'd be happy to use the refer-a-friend promo if it works out. I think my husband would like the Apple watch, but maybe I can somehow use two promos if I'm transferring more than 200k.

If you are transferring several hundred thousand, it may be worthwhile for you to investigate moving to a big bank discount brokerage like RBC Direct. You may have much more flexibility there to have them cover transfer costs and gain additional perks (like free trading commissions on your first 10 trades or something like that). If you are investing several thousand dollars at a time, the commission costs of buying ETFs will be negligible over the long run.

Don't get me wrong, Questrade is good at what they do for the price. But this means they are most beneficial to beginning investors who buy ETFs in small chunks. Their customer service can be lacking at times.

Thanks. I will be moving a big chunk at first, but then will be buying monthly. To maintain my asset allocation split out into several accounts, that will probably mean several trades a month, which is why I thought Questrade might be best. My brother actually works for rbc investments so he would be happy to hear that. I'll have another look at RBC Direct costs.

[FrugalFan]

Thanks, all! Makes sense to transfer the registered accounts in cash and the margin in kind at first. I'll have a look at all the promos. I'd be happy to use the refer-a-friend promo if it works out. I think my husband would like the Apple watch, but maybe I can somehow use two promos if I'm transferring more than 200k.

If you are transferring several hundred thousand, it may be worthwhile for you to investigate moving to a big bank discount brokerage like RBC Direct. You may have much more flexibility there to have them cover transfer costs and gain additional perks (like free trading commissions on your first 10 trades or something like that). If you are investing several thousand dollars at a time, the commission costs of buying ETFs will be negligible over the long run.

Don't get me wrong, Questrade is good at what they do for the price. But this means they are most beneficial to beginning investors who buy ETFs in small chunks. Their customer service can be lacking at times.

I called them a few times and they are very helpfull, unless you have had a bad experience.

Good to know! The guy I was chatting with online the other day wasn't very helpful, but the guy I spoke to on the phone when I signed up for the trial account seemed good. I think I need to get him back on the phone.

[fb132]

Thanks, all! Makes sense to transfer the registered accounts in cash and the margin in kind at first. I'll have a look at all the promos. I'd be happy to use the refer-a-friend promo if it works out. I think my husband would like the Apple watch, but maybe I can somehow use two promos if I'm transferring more than 200k.

If you are transferring several hundred thousand, it may be worthwhile for you to investigate moving to a big bank discount brokerage like RBC Direct. You may have much more flexibility there to have them cover transfer costs and gain additional perks (like free trading commissions on your first 10 trades or something like that). If you are investing several thousand dollars at a time, the commission costs of buying ETFs will be negligible over the long run.

Don't get me wrong, Questrade is good at what they do for the price. But this means they are most beneficial to beginning investors who buy ETFs in small chunks. Their customer service can be lacking at times.

I called them a few times and they are very helpfull, unless you have had a bad experience.

Good to know! The guy I was chatting with online the other day wasn't very helpful, but the guy I spoke to on the phone when I signed up for the trial account seemed good. I think I need to get him back on the phone.

I guess it proves that like any other job, you have excellent workers and you have some bad apples too...you probably fell on one who sucks at his job.

[daverobev]

There's nothing *wrong* with the big banks' brokerages, except that like everything else they are primarily concerned with the other products of the banks.

I have a small amount of stuff with CIBC Investor's Edge. I like them because it is $7/trade for everyone now, and you don't have to mess with US$ - they automatically convert CAD to USD *at spot* in registered accounts. I don't know why, but they do. So no Norbert's Gambit necessary.

Scotia keep sending me messages about how I can qualify for $10 trades. Gee, thanks.

OP, if you are putting *lots* of money across, and especially if you use margin, look at Interactive Brokers. They have 1c/share commissions min $1 for North American stuff (I forget the max but it's not more than $10), margin is under 2% for CAD and USD I think.

The downside with IB is that you don't get live data for free (you get real time live quotes with Questrade), and they have maintenance fees unless you have more than $100k USD with them. But IF you are putting large amounts over... yeah IB are really good. Plus you can trade on a bazillion exchanges if you want.

OTOH if you are just doing simple stuff, Questrade is still just fine. NA ETFs? Easy. Live data for quotes included, etc.

[FrugalFan]

Thank you daverobev, I hadn't heard of them but I will have a look.